Author: Tronserve admin
Wednesday 4th August 2021 11:16 AM
Coronavirus: China’s Manufacturing Prices Plunge Further in March, With Consumer Inflation Easing
China’s manufacturing sector continued to suffer from the impact of the coronavirus pandemic in March, as data released on Friday showed factory gate prices contracted at a faster pace last month.
The producer price index, reflecting the prices that factories charge wholesalers for their products, dropped 1.5 per cent year-on-year last month, data from the National Bureau of Statistics (NBS) showed.
That was worse than the 0.4 per cent fall in February and above the 1.1 per cent contraction tipped in a Bloomberg survey of analysts.
Meanwhile, China’s consumer price index rose 4.3 per cent from a year earlier, falling sharply from a 5.2 per cent gain in February, according to the NBS. Analysts polled by Bloomberg had expected an inflation rate of 4.9 per cent.
China has brought the domestic outbreak of the coronavirus under control in recent weeks, allowing authorities to relax some of the draconian restrictions aimed at containing the disease and kick-starting the economy in the process.
On Wednesday, authorities lifted a lockdown imposed in late January on the central Chinese city of Wuhan, the initial epicentre of the outbreak.
However, with much of the world still grappling with the outbreak, export orders for Chinese manufacturers are slumping, raising fears about a second wave demand shock that could see China’s economic growth fall below 3 per cent in 2020.
The central government is urging businesses to resume operations and ramping up support, as it seeks to turn the economy around from what is expected to be a contraction in the first quarter.
Data last week also showed sentiment in China’s bounced back strongly in March, though analysts warned that the rise mainly reflected the resumption of business in March after a miserable February, when the country was effectively shut down due to the coronavirus, rather than a return to normal economic activity.
The official manufacturing purchasing managers’ index (PMI) – a survey of sentiment among factory owners in the world’s second largest economy – was 52.0 in March, up from an all-time low of 35.7 in February.
China’s non-manufacturing PMI – a gauge of sentiment in the services and construction sectors – also recovered to 52.3 from 29.6 in February, another record low.
Analysts generally agree China’s economy is likely to rebound in the second quarter starting in April, although there is debate about how strong the recovery will be.